Notice of assignment vs letter of release: who gets paid

A notice of assignment tells a broker to pay your factoring company. A letter of release tells the broker it can pay you directly. Your factoring company normally sends both.

What a notice of assignment does

When you sell an invoice to a factoring company, it buys the invoice and pays you most of it up front. Then it collects from the broker. The notice of assignment, or NOA, is how the broker learns where that money goes now.

Once a broker has a valid NOA on file, it pays your factoring company. Calling to ask for one load to be paid to you won't change that. A broker that pays you after getting the notice can still owe the factoring company for the same load.

With an NOA:

• Your factoring company does the collecting, and its fee comes out of every invoice it buys.
• The notice usually covers every load you run with that broker until a release comes in.

What a letter of release does

A letter of release, or LOR, works the other way. Your factoring company gives up its claim on your invoices with that broker, so the broker can pay you.

• Only your factoring company can send it. You can't send one yourself, and the broker can't send one for you.
• It usually names the broker it releases, or says it releases all your customers.
• It usually covers loads after the release date. Your factoring company still collects on invoices it already bought. If the broker pays you for one of those, expect to pay that money to your factoring company.

When the broker pays you directly, there's no factoring fee on those loads, because you didn't sell them. You get paid on the broker's terms, and you do your own collecting.

Read your factoring agreement before you ask for a release. Many agreements cover every invoice you issue, not just the ones you sell. This is general information, not legal advice.

Switching between the two

• Factoring to paid direct, with one broker. Ask your factoring company for a release that names that broker. Send the broker your bank details, then ask it to confirm it has both before you count on the next payment.
• One factoring company to another. The old one sends a release and the new one sends its NOA. Brokers often want the release before they'll act on the new notice, so get it sent first.
• Paid direct to factoring. Your factoring company sends the NOA. Payments switch over once the broker has it on file.

Keep a copy of every letter and the date it went to each broker. If a payment ever lands in the wrong place, those dates show what the broker had on file.

How it works with Bainbridge Brokerage

Use a factoring company? You can get paid either way with us.

• Keep factoring. Your factoring company sends us an NOA, and we pay the factoring company.
• Get paid directly. Your factoring company sends us a letter of release naming Bainbridge Brokerage, LLC, MC 1390499. Send us a voided check at ach@vorto.ai.

If we pay you directly, you're paid the next business day once you approve your load for invoicing, with no fee for getting paid early. When your factoring company holds an NOA, we pay it the next business day too.

Your factoring company sends its NOA or letter of release to factors@vorto.ai. Our carrier payments page has what to send and where.

Before you send bank details

With any broker, us included: if anyone asks you to send bank details or a release somewhere new, call first. Use a number you looked up yourself.

Our phone is (303) 276-2378, the number on our FMCSA record. Hours: Mon-Fri, 8 AM-5 PM Mountain.

Our verify page shows how to check us on FMCSA by MC 1390499 or USDOT 3832071. Pay and settlement questions go to apinquiry@vorto.ai. Carrier support lists what to have ready.

New to us? Carrier setup walks through the paperwork, and the application takes about two minutes.